In the chemical industry, product formulations are often the core factor that creates a business's competitive advantage. For many products such as cosmetic chemicals, detergents, food additives or specialized industrial preparations, the commercial value lies not only in the brand but also in the mixing ratio, additive ingredients, technical processes or technological know-how invested and researched by enterprises for a long time.
TPesticides manufactured by Vietnam Pesticide Joint Stock Company. Source: People's Deputies Online
However, due to the fact that chemicals have the potential to directly affect human health and the environment, current legislation increasingly requires businesses to be transparent about information related to the composition and level of harm of products. This puts businesses in a difficult situation: if they disclose information that is too detailed to fully comply with legal obligations, businesses are at risk of revealing technological secrets; On the contrary, if information disclosure is limited to protect product formulas, businesses may face the risk of being administratively sanctioned or forced to recall products circulating on the market.
In this context, correctly identifying the boundary between the obligation of information transparency and the right to protect trade secrets is especially important for enterprises operating in the chemical sector
1. Obligation to be transparent about information in chemical activities
Decree 37/2026/ND-CP stipulates that goods labeling is the expression of necessary contents about chemicals on product labels, in order to help users identify, select and use properly, and at the same time create a basis for authorities to inspect and supervise. Appendices I and IV of this Decree also require the labels of chemicals, household chemicals and some products using other chemicals such as food additives, cosmetics, etc. of enterprises to clearly state the quantity, composition or content of active ingredients of the products. which includes the following contents: (i) chemical formula, (ii) structural formula, and (iii) quantitative ingredients. In addition, according to the Law on Chemicals 2025, organizations and individuals trading in chemicals are obliged to provide full and accurate information on the content of hazardous chemicals in chemicals, products and goods containing hazardous substances to competent authorities. Accordingly, in some cases, sensitive information about the composition, content or hazardous properties of the product may have to be recorded on the label, provided in the management dossier or shown in the chemical safety sheet. This is the awkward intersection for businesses between the obligation to be transparent about information and the need to protect business secrets.
Meanwhile, the Law on Intellectual Property 2005 stipulates that trade secrets are information obtained from financial and intellectual investment activities, which have not been disclosed and can be used in business to create a competitive advantage. Article 84 of the 2005 Law on Intellectual Property also stipulates that information about chemicals is only protected as a trade secret when three conditions are met simultaneously: (1) It is not common knowledge and is not easily obtained; (2) When used in business, it will give the holder of the trade secret an advantage over the person who does not hold or does not use such trade secret; and (3) are kept confidential by the owner by means necessary to prevent such trade secrets from being disclosed and not easily accessible.
In the practice of the chemical industry, the information that is often considered a trade secret by businesses is the mixing formula, the ratio of ingredients or technical additives that play a decisive role in the performance and quality of the product.
2. How transparent is the information and how secure is the business?
The core legal conflict arises from the fact that the Law on Intellectual Property 2005 requires that trade secrets must be "undisclosed" information, while Decree 37/2026/ND-CP forces enterprises to show the composition formula and quantitative composition on the goods label. When businesses fulfill their chemical labeling obligations, they also publicize their own business secrets. When part of the information about the ingredient or content has been disclosed on the label or in the disclosure dossier, the scope of trade secrets can be significantly narrowed. However, this does not mean that all technological know-how is inprotectible, if the enterprise still proves that the remaining information such as detailed mixing ratios, production processes, technical conditions or quality control methods has not been disclosed and has been secured by appropriate measures.
This problem does not only appear for businesses dealing in toxic or dangerous chemicals, but covers the entire chemical industry, including household cleaning products, cosmetics or food additives and many other similar products. For these businesses, product formulations are often the factors that create competitive advantage and core commercial value. Therefore, the mandatory disclosure of quantitative ingredients under Decree 37/2026/ND-CP has created significant legal risks when businesses are faced with a difficult choice between fully complying with labeling obligations and protecting the confidentiality of product formulations.
3. Mechanism for settlement by information encryption
According to Article 26 of Decree 26/2026/ND-CP, organizations and individuals that declare, register, report, update information, and update data in accordance with the Law on Chemicals 2025 have the right to request the confidentiality of information related to technological know-how by declaring and registering according to the encrypted information approved by the competent authority. This mechanism allows enterprises to request the confidentiality of some information related to technological know-how, trade secrets or other confidential information in the process of declaring, registering, reporting and updating chemical data.
However, it is necessary to be cautious when applying this mechanism to the content shown on goods labels, because goods labels must still fully comply with the specific requirements of the law on labels and specialized laws. The Law on Chemicals 2025 also clearly stipulates information that is not allowed to be encrypted, such as the trade name of chemicals; Name of the organization or individual producing or importing the chemical; agencies, organizations and individuals shall implement the regime of updating information and data in the specialized chemical database; Chemical safety sheets;...[1]. This limit is set to ensure the principle of prioritizing the protection of public health and environmental safety over the commercial rights and interests of organizations and individuals engaged in chemical-related business activities.
The 20th International Chemical Industry Exhibition - VINACHEM EXPO 2024. Source: People's Deputies Online
4. Practical recommendations for businesses
In order for the formula, mixing ratio or quantitative composition of the product to be recognized as a trade secret and meet the conditions for protection under regulations, the enterprise must prove that it has applied "necessary measures" to ensure that this information is not disclosed and not easily accessible. In fact, this requirement does not only stop at businesses identifying information as "confidential", but also requires appropriate governance and security systems to prove that the business actually intends to protect that information as an important commercial asset.
Security measures can be implemented in many forms such as: entering into information security agreements (NDAs) with personnel and partners who have access to product formulas; promulgating regulations on management of internal technical data; decentralized access to recipe records, R&D data, and technical documentation; apply technological solutions to control, trace or restrict the copying and transfer of information. Documents and records showing the process of implementing these security measures are not only meaningful in internal management, but also an important basis for businesses to prove the legality of confidentiality requirements when working with state agencies or when disputes arise related to acts of infringing on business secrets.
In addition to building an internal security system, businesses also need to actively classify information into specific groups, including: (i) information that is required to be disclosed in accordance with the law; (ii) information is only provided to competent state agencies; (iii) information that may require confidentiality or encryption; and (iv) information that is absolutely circulated internally. On that basis, enterprises need to separately review each type of document such as product labels, chemical safety sheets, product announcement or declaration documents, marketing documents, technical catalogs, websites and even contracts with distributors or trading partners to limit the risk of information disclosure beyond the scope required by law.
In fact, the risk of disclosing trade secrets not only arises from the obligation to disclose information in accordance with the law, but also from the "over-disclosure" of enterprises in business activities and product marketing. Many businesses inadvertently include too much technical information related to formulations, blending ratios, or specific additives in catalogs, sales materials, or trade promotional content without being fully aware of the legal risks involved.
In addition, businesses should actively carry out procedures for requesting information security or encryption with the competent authority before the product is put on the market. The approval of the information security mechanism by the competent authority not only helps businesses minimize the risk of disclosure of technological know-how, but also creates an important legal basis to explain to the inspection agency, check the quality of products and goods as well as protect their legitimate rights and interests when disputes arise in the future.
5. Conclusion
In short, the conflict between labeling obligations and the right to protect trade secrets reflects the inadequacy between two objectives: ensuring transparency of information about the safety of products and protecting trade secrets of organizations and individuals. The proactive application of the information security registration mechanism under the encryption mechanism is a core solution to help businesses balance legal obligations and protect their competitive advantages.
Nguyen Ngoc Ky Duyen – Bui Hoang Nhat Minh
HM&P Law Firm
[1] Clause 2, Article 26 of Decree 26/2026/ND-CP.
